With $439 million to play with Ross Asset Management (RAM) would be one of New Zealand's largest boutique fund managers and perhaps the biggest in what is understood to be its chosen asset class of global equities.

As RAM doesn't offer any formal retail fund it's therefore not subject to all the messy, expensive compliance duties other less-exclusive operations must adhere to such as: issuing a prospectus and investment statement; setting up a corporate trustee structure, or; using an independent custodian to ensure all transactions are carried out correctly.

In short, all that boring back-office process that retail investors choose to ignore (but can nevertheless read about in publicly available documents) is even more of a mystery in an operation like RAM.

According to the Financial Services Providers Register, Ross Asset Management is in the business of: Keeping, investing, administering, or managing money, securities, or investment portfolios on behalf of other persons.

In practice, this likely means RAM provides a 'discretionary investment management service' to its 900 or so clients, who would own broadly the same underlying assets (selected by RAM) but administered under some kind of individual accounts system.

If the $439 million figure is accurate, that works out at an average investment of just about $500,000 per client, which indicates many of them may be defined as 'eligible persons' on the grounds of being wealthy as per the threshold in the current law (which may change under the imminent Financial Markets Conduct Bill) of: net assets of at least $2,000,000; or annual gross income of at least $200,000 for each of the last two financial years.

These are allegedly sophisticated investors.

Whatever has gone wrong at RAM and there is little detail available the confusion and air of suppressed panic apparent in comments from its clients indicate some of them have no idea how their money is actually managed.

David is a freelance journalist who has covered the financial services business on both sides of the Tasman for over 15 years. He is the editor of industry website Investment News. David has edited magazines and websites for the financial advice, investment and superannuation industries.